I've signed up to lemmy.world don't know what an instance is or why it might be important to sign up to something different. Want to help as much as possible.
Please educate me!
Whereas you signed up on lemmy.world, I signed up on lemmy.ca.
Our accounts live on these different instances of the same platform.
Someone else may have an account on sh.itjust.works.
Each of these instances can have communities (subreddit equivalent). Through federation (essentially agreement to talk with eachother). We (account holders on different instances) can interact, post and comment anywhere on these and other federated instances.
In a weird way, these instances are an adhoc load balancer since I am using resources primarily from lemmy.ca and you are using resources from lemmy.world. This last piece is most relevant to the potential issue stated. A good load balancer, balances the load efficiently and effectively. If everyone made an account on lemmy.world it would get an uneven share of the load and struggle to keep its infrastructure alive or scaled well. Additionally, it goes against the decentralized nature of federated instances.
Now please take this all with a grain of salt, I have been here since july 1 and so am taking the rough concept I've learned and tried to explain it. Likely missing critical technical details and the analogies may be imperfect. :)
The best analogy I've seen is "think of your lemmy instance as your email provider". Your account "lives" in your home instance, but no matter which instance you are you can see content and interact with all instances that are connected.
Since the instance you are doesn't matter much, people recommend spreading simply to avoid overloading one instance with too many users.
Email analogy is good to explain the systems architecture, but it still doesn't communicate ethics of proper use (decentralization). Just look how many people have gmail or outlook as their mail account.